Although the document is yet to be published the Treasury has decided to set the price cap on stakeholder products at 1.5%, The Daily Telegraph claims today.
The paper says the move means the department has caved in to mounting arguments from the life insurance industry - chief of which is a lower cap makes such products uneconomic to manufacture and sell.
The official publication of the Treasury's paper is yet to take place, it is widely expected within days.
LOOKING AT the UK economy as a whole, chancellor Gordon Brown yesterday announced he is all for further interest rates rises, and said he would give the Bank of England his full support as it attempts to calm down mounting house prices.
The Scotsman says Brown also endorsed BoE governor Mervyn King's comment earlier this week, when he warned house prices were rising too fast and too far.
Speaking to City bankers in London, Brown said the "overheated" housing market was one of the main threats to the UK economy.
BUT DESPITE offering King and the BoE his full backing, the chancellor was still given a sharp blow by the governor last night after he issued a warning over the state of the nation's finances, reports the Times.
Speaking at the same meeting as Brown, King sounded a note of warning at the increase in public borrowing triggered by the chancellor’s spending drive.
According to King, the "golden scales which balance spending and revenues" have "tilted more and more towards the spending side".IFAonline
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